SQUARE FEET; In Chicago, a Haven For Green Enterprise

By KEITH SCHNEIDER

Published: July 25, 2007

A landmark brick and concrete factory, used in the first half of the 20th century to manufacture men's underwear and in much of the second half to make fine lamps, is set to serve a 21st-century role. The building, in the city's Logan Square neighborhood, will be the Midwest's first shopping center for environmentally focused stores and services.

The 250,000-square-foot loft building, now known as Green Exchange, presents itself as a center of product and service innovation for business tenants who view natural products and care of the environment as a marketing opportunity and a way of life. The notion is that different kinds of businesses that subscribe to common principles can benefit from being together in one place, sharing ideas and customers.

The owner and builder, Baum Development, says it already has commitments for nearly 30 of the 100 Green Exchange spaces. The prospective tenants include an electric vehicle dealer, a green building supply company and a treeless paper packaging company. The rents are expected to be $18 to $35 a square foot annually, in line with market rates for the area.

About 20 percent of the business spaces at Green Exchange have been designed so that the tenants can build a bathroom and small kitchen, enabling them to live there.

The novel commercial real estate project is part of the expansion of environmentally oriented investments and policies that are reshaping Chicago's economy: office buildings with green roofs, a city-built incubator for green businesses, fleets of ultraclean buses and municipal electric vehicles.

While other developments have trumpeted their green qualities in recent years, Green Exchange directly tests Chicago's market for products and services intended to produce a cleaner, more natural and healthier way of life.

Within the next two months and perhaps as early as August, according to Manuel Flores, the Democratic alderman of the First Ward who represents Logan Square, the Chicago Plan Commission is expected to issue final land use and zoning approvals.

Mayor Richard M. Daley vigorously supports the project. ''Green Exchange is a great example of the public-private partnerships that are working together to help make Chicago one of the most environmentally friendly cities in the nation,'' Mayor Daley said in a statement last December.

The builders of Green Exchange are David L. Baum, 41, and his brother, Douglas P. Baum, 39, who own and manage a realty and development company that specializes in converting Chicago's old buildings to new residential and commercial uses.

In September 2005, just after the four-story Frederick Cooper Lamp factory closed, putting 110 people out of work, Baum Development spent $7.5 million to buy the 93-year-old building, not knowing what they would eventually do with it. At the suggestion of Mr. Flores, who insisted that the building be used to develop new businesses and not condominiums, to replace some of the jobs that were lost, the Baums embraced the idea of a hybrid building -- part market, part business incubator and part professional office complex -- with an eco-friendly twist.

''In order to be a tenant in Green Exchange, you must be doing something to advance the green marketplace,'' said David Baum, who started in business with his brother in 1989, when they bought, renovated and sold for a tidy profit an old Chicago home that held two apartments.

Mr. Baum said his company had invested $1 million on demolition and architectural designs for Green Exchange. Major construction is to begin as soon as the final land use and zoning permits are issued. The building could open by September 2008 at a total project cost of close to $40 million, he said.

''We liked the building as soon as we saw it,'' Douglas Baum said. ''It's got great bones. It's a solid structure with high ceilings and big windows. It's in the right place. It had all the markings of something we could work with.''

Situated on West Diversey Avenue and alongside the Kennedy Expressway about five miles northwest of the downtown Loop business district, Green Exchange is among Chicago's noticeable mercantile landmarks. An ornamented four-sided water tower graces the building's roof.

The Baums hired Hartshorne Plunkard Architecture to produce a design that makes use of the tower and the building's other architectural details, including a horseshoe footprint that allows natural light to penetrate from banks of big windows. The first and second floors are to provide space for retail outlets and showrooms. Offices and the live-work spaces will occupy the third and fourth floors.

The building will have an open design to encourage an almost dormlike informality enabling tenants to learn from one another.

Among other features that the Baums say will make Green Exchange one of the most environmentally sensitive and energy-efficient buildings in Chicago is a 60,000-gallon cistern on the ground floor to store rainwater to irrigate plants and grasses on the green roof and to use in an energy-efficient heating and cooling system.

Green Exchange will have escalators that use 30 percent less energy than conventional models because they will slow down when nobody is using them. Nontoxic construction materials and coatings will be used to improve the quality of the indoor air. It also will have a 9,000-square-foot garden courtyard and parking spaces with outlets to recharge electric vehicles. It is on a busy Chicago Transit Authority bus route and close to a Blue Line subway stop.

Just one other market in the United States, the Jean Vollum Natural Capital Center in Portland, Ore., is similar to Green Exchange, environmental specialists say. That 70,000-square-foot center, owned by Ecotrust, a nonprofit environmental organization, is housed in a 112-year-old warehouse close to downtown. Its 19 tenants include an organic coffee shop and an organic pizza restaurant, an environmental bank, an investment firm that specializes in sustainable companies, and several nonprofit environmental groups and foundations.

Green Exchange is nearly four times that size and will have a broader mix of tenants, executives at Baum Development say. One tenant is Rick Sbragia, a veteran car dealership manager and now the owner of Electric Avenue Auto Mall in Oak Forest, Ill., which sells electric vehicles and hybrid cars. Mr. Sbragia is negotiating with the Baums for space on the first floor of Green Exchange to showcase three- and four-wheel electric vehicles made by Myers Motors of Ohio, vehicles made by the Zenn Motor Company of Toronto, and Chinese made ZAP electric vehicles.

Other Green Exchange tenants are I-GO Car Sharing; the Consolidated Printing Company, a commercial printer that uses all-vegetable ink and recycled paper; and Distant Village Packaging, which sells hand-produced packaging for the specialty gift industry made from wild grass, banana fiber and other ''tree free'' paper.

Ori Sivan plans to move his company into Green Exchange because he wants a larger space. ''We can't wait,'' said Mr. Sivan, an environmental engineer and the co-founder with his partner, Joe Silver, of Greenmaker Building Supply, a two-year-old company that sells nontoxic construction materials in a 5,000-square-foot storefront on North Pulaski Road.

''Everything you can think of in green business is in one place: health, food, building supply, transportation, paper, paint, furniture, clothing, investment,'' Mr. Sivan said. ''It's going to be like a big family.''

Photos: The brothers Douglas P. Baum, far left, and David L. Baum spent $7.5 million to buy this 93-year-old factory building in the Logan Square neighborhood of Chicago. (Photographs by Peter Wynn Thompson for The New York Times)